Traditional IRA contribution
If individual is eligible to contribute to 401k but does not, can they make TIRA contributions without earnings limitations?
Also if individual was making TIRA contributions all of 2021 and in the last few months of the year changes jobs and gains access to 401k do they have to remove TIRA contributions for 2021?
Permalink Submitted by Alan - IRA critic on Thu, 2022-02-17 01:00
Yes, but only if no additions are made to his account from forfeitures or certain profit sharing arrangements. In addition, if the individual is accruing benefits from a DB plan, they are an active participant. Finally, if the individual is married and the spouse is an active participant, the individual would still have an income limit, only higher.
Permalink Submitted by David Mertz on Thu, 2022-02-17 12:37
Being an active participant in an employer plan does not make you ineligible to make a TIRA contribution, so changing jobs would not make earlier contributions be excess contributions that would have to be removed. It might just make them nondeductible TIRA contributions depending on your MAGI, which you could choose to remove if you do not want to make nondeductible contributions.